Mahindra, Ideal Motors invest Rs 2.5 bn for assembly plant

Mahindra & Mahindra Ltd., a part of the USD 19 billion Mahindra Group based in India, entered into a joint venture last week with Ideal Motors Ltd., a fully owned subsidiary of the Ideal Group, to assembly automotive vehicles in Sri Lanka.

Mahindra will hold a 35% stake in the JV, while Ideal Motors will have a 65% stake. Ideal Motors has been a trusted Mahindra distributor for the last 9 years, and with this joint venture Mahindra will strengthen its presence in the country. The plant will be developed over the next one year under the expertise of the Mahindra team, and will incorporate global technologies.

Sanjay Jadhav, Vice President, Head of International Operations - AFS (South Asia), Mahindra & Mahindra Ltd, said, “Sri Lanka is one of Mahindra's top three export markets, and today’s announcement with Ideal Motors builds the foundation for newer opportunities for both of us. We have a strong vision for growth in Sri Lanka and this move is an integral part of that plan. The changes faced by the automotive industry today are triggered by the accelerated rise of new technologies, consumer needs and sustainability in policies. We see the need to anticipate new market trends, explore alternatives and build powerful synergies here in Sri Lanka.”

Speaking on the occasion, Nalin Welgama, Founder and Executive Chairman Ideal Group, said, “In the sixties, the renowned late industrialist Upali Wijewardene had the foresight to assemble automobiles through a licensing agreement from two major international manufacturers. Today, Ideal Motors is proud to be a pioneer in setting up the first automotive assembly in direct partnership with automobile giant Mahindra. This Joint Venture will only build upon the wonderful relationship both companies have shared for nearly a decade. I am sure that the commitment and expertise of both Mahindra and Ideal Motors will lead to new horizons.”

Mr. Welgama further added, “The new facility will not only contribute to human capital development, but will also enable collective development of local automotive components manufacturers to international standards under the global expertise of Mahindra. This is a leap forward for the Industry, adding value to the meaning of ‘Made in Sri Lanka’ and opening broader opportunities for national growth”

He went on to say “for all founders going public is a momentous milestone culminating in years of hardwork and personal sacrifices which could only be fully appreciated once experienced. However, in this case for me, it is the creation of a truly Sri Lankan car that stands foremost”.

Speaking on the occasion, Aravinda de Silva, Deputy Chairman of the Ideal Group said, “Ideal Motors is a customer-centric automotive company with the vision to be the ultimate choice for value based products and services, ensuring growth amidst tough competition. Today’s strategic partnership represents a quantum leap for both companies as it will enable us to deliver products at affordable prices.”